City of Indianapolis v. Chase Nat. Bank of City of New York (Two Cases). Chase Nat. Bank of City of New York v…

Summary

The Court held that diversity jurisdiction requires alignment of parties according to their actual interests in the principal purpose of the suit and the primary and controlling matter in dispute. Because Chase and Indianapolis Gas both sought to establish that the lease bound the City, Indianapolis Gas had to be aligned with Chase, placing Indiana citizens on both sides and defeating diversity jurisdiction. The Court reversed and explained that its earlier denial of certiorari could not confer jurisdiction. Justice Jackson dissented, joined by Chief Justice Stone and Justices Roberts and Reed. They maintained that Chase asserted genuine claims against Indianapolis Gas, including liability for unpaid interest, and that common interests on another claim did not justify realignment; they would have proceeded to the merits.